Erik Hansen is a graduate student pursuing a Master of Public Policy and the “When I Was a Mustang…” columnist.
Imagine for a moment you are a dependent — about to be independent — undergraduate student, set to graduate from our fine institution of learning this spring.
You have accumulated $31,000 in federal Direct Loans over your four, five or six-year career here. Discounting the PLUS and/or private loans you probably also took out — instead of getting a job like you should have — you’ll be making, under a Standard Payment plan, payments on your loan of approximately $360 a month for the next 10 years. This is the equivalent to making a car payment every month, for the next 10 years, for a Toyota Prius you’re never going to see or drive, which is actually OK, because seriously, would you want to be seen driving one of those things anyways?
While there are several different loan repayment schemes, including Standard Payment, Graduated Payment, Income-Based Payment and Long-Term Payment, the best payment scheme is the “no payment” scheme.
While it is highly unlikely you’ll ever be able to default on — a.k.a. weasel out of — your student loans, even through bankruptcy, there are several ways to have someone else pay off your loans for you, at least partially. No, I’m not talking about your parents, and there will be some sacrifice involved. Think about it, is there anything in life that is free?
The following are some of the most common methods for having one’s student loans paid off for them:
Become a teacher: If you like having your summers off — and can deal with little shits — then sign up to teach full-time. While under certain conditions your loan will be completely forgiven, most teachers are able to get up to $17,500 of their federal student loans forgiven. Some special conditions, including subject matter (math, science and foreign language) and teaching location (low income and/or “disadvantaged” areas), will net a larger benefit to the teacher. The American Federation of Teachers (AFT) maintains a database of forgiveness options in various locations.
Work as a nurse: Be like Gaylord Focker and become a nurse, or “murse.” The Nursing Education Loan Repayment Program (NELRP) will repay as much as 60 percent of a student’s federal loans if they work full-time, in a facility with a shortage of nursing care for two years. If they work in a shortage area for three years, they may also qualify for an additional 25 percent. This loan forgiveness program is available for those with an associate’s, bachelor’s, graduate degree or nursing diploma.
Work for the government: If “the man” is going to have his hand up your ass until all of your federal student loans are paid off, you might as well ask for a reach around. If you work in one of a variety of public service positions — e.g. city planner, police officer, street sweeper — you’ll be eligible to have your federal student loans repaid after 10 years on the job. The College Cost Reduction and Access Act will repay the balance of government employees’ student loans after 120 consecutive payments have been made. For more information, check out the National Association of Student Financial Aid Administrators’ (NASFAA) website.
Join the Military: Military service has long been a way to pay for college, or get college paid off. The military currently has a “College Loan Repayment Program.” The current maximums are:
Army – $65,000
Army Reserve – $20,000
Army National Guard – $20,000
Navy – $65,000
Navy Reserve – $10,000
Air Force – $10,000
Air National Guard – $20,000
Unfortunately, the Marine Corps, Coast Guard and Air Force Reserves do not offer a student loan repayment program.
The military repays 33.3 percent of the outstanding principle balance of the loan annually, for each year of active service. The Army and Navy Reserves will repay 15 percent of the outstanding principle balance of the loan annually, for each year of service. The Air National Guard will also pay 15 percent annually against the outstanding principle balance.
Volunteer: Volunteering gives you the chance to give back to the world. Eh, whatever. If you spend your time volunteering with Americorps or Volunteers in Service to America (VISTA), you can get your student loans repaid. If you’re willing to devote a year of your life to volunteering for Americorps, you’ll be rewarded with $4,725 to spend on your college debts and a stipend of up to $7,400. VISTA, which is all about community development and ending poverty, homelessness and illiteracy in the United States, will pay off $4,725 of your loans if you join in on their cause for at least 1,700 hours.
So next time student loans seem like a debt you’re not willing to take on, weigh your options. Consider giving back through a career after college that will pay back an inevitable loan.